negotiating fees with a real estate agent?

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homermtb
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Joined: Tue Jul 15, 2014 11:26 pm

negotiating fees with a real estate agent?

Post by homermtb »

My wife and I are planning would like to buy a new house in the next 6 months. We're also interested in selling our current house and condo.

I'm trying to choose between using a discount real estate agency like redfin, or if I should use a full service real estate agent. Does anyone have any experience with redfin? Is there any downside to using them in a competitive real estate market like Southern California where houses frequently have multiple offers and end up being sold above asking price?

Also, If I choose a full service real agent, is there any way to ask for a fee reduction or kickback since i'm giving them business on 3 separate transactions (new home purchase,home sale and condo sale)?
livesoft
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Re: negotiating fees with a real estate agent?

Post by livesoft »

homermtb wrote:Also, If I choose a full service real agent, is there any way to ask for a fee reduction or kickback since i'm giving them business on 3 separate transactions (new home purchase,home sale and condo sale)?
Yes, there is a way. Just ask. Everything is negotiable. How good are you at negotiating? Refuse to do business with anyone that does not agree to your terms. The other side to this is that they can do the same. That's what negotiating is about: agreeing to terms.
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jfn111
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Re: negotiating fees with a real estate agent?

Post by jfn111 »

Fees are always negotiable. The Home and Condo sale could be negotiated down to around 5%. The listing agent has to split this with the buyers agent and if he's not offering at least 2.5% there isn't going to be a lot of people looking at your property (high sought after markets are a different story).
The kickback on his commission for finding you a house could be problematic. There are certain State laws that prohibit a Licensed agent from giving money to an unlicensed person.
yeledbed
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Re: negotiating fees with a real estate agent?

Post by yeledbed »

I don't know about listing a home with Redfin, but I just bought a home using Redfin (in Northern VA) and was very pleased with the experience. Sure, I had to find listings on my own (no big deal with Redfin's automatic search/email feature) and I didn't always work with the same agent, but I was never subjected to a "hard-sell" or pressured to put in an offer on a house that wasn't right for me (which did happen when I tried to buy with a traditional agent.) It took me six months to find the right place (which was no problem for Redfin), but my traditional agent became noticeably agitated with me after only two months of searching. Maybe she was a bad agent and I had a uniquely bad experience. Maybe not.
I do have a coworker who bought and sold last year using Redfin for both transactions. He sold his house in less than a week, but I think that speaks more to our local market than Redfin. I would think in a hot market, the listing agent wouldn't matter much.
Frankly, with every property listed in the MLS available on the internet, I don't see the value a "full-service" broker/agent adds. Plus, there's the Redfin rebate worth about 1% of the purchase price, which isn't chump change in HCOL areas. Why pay more when you don't have to?
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Lancelot
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Re: negotiating fees with a real estate agent?

Post by Lancelot »

Yes, I have negotiated fees with a realtor; I asked for a 1% discount and the realtor agreed. However, the realtor quickly brought me a full asking price offer- so sold and never discounted the fee :)

You might consider asking for a discount but rewarding the realtor for excellent service.
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friar1610
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Re: negotiating fees with a real estate agent?

Post by friar1610 »

As other posters have said, things are always negotiable but you have to ask. I've bought and sold a number of houses. Here are a few things I've done at various times:

- Negotiated the 6% commission down to 5% pure and simple.
- Negotiated the 6% commission down to 4.5% or 5% if the listing agent also sold the house.
- Negotiated the offered 4% commission down to 3% if a member of the listing agent's "team" (in this case, her mother and sister) was also the selling agent. This happened in the case of one house, so it saved me a bundle.
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MindTheGAAP
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Re: negotiating fees with a real estate agent?

Post by MindTheGAAP »

We just used a flat-fee service to list our home on the local MLS site. We still offered the traditional 3% to a Buyer's Agent but paid just $995 to list and have them assist/represent us in contract negotiations. My wife and I have been thrilled so far and don't think it lost us any ground on others selling - we came up with our own list price, took our own photos and if the potential buyer didn't have an agent then we showed the home to them. Would definitely recommend.

On the buying side, we'll use the same company (Creekview Realty) to buy and we get a 2% rebate from their 3% commission. We find the house, look at the home, and tell them we'd like to make an offer. They perform a CMA for us and submit the formal offer for the listing agent to present to their client. Since we do all the legwork even with the agent, this seems like a more beneficial option to us. This is similar to what Redfin offers.

Feel free to ask any questions - I am in no way associated with Creekview Realty.
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denovo
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Re: negotiating fees with a real estate agent?

Post by denovo »

Tell them you'll do all the leg-work of finding a home yourself, that shouldn't be hard in the days of Zillow, you're competent enough to get to bogleheads.org/forum, you can do zillow too. Ask agents , given the three transactions, that you want 4.5 percent on the two sales. I am sure you'll find an agent willing to do this.
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sscritic
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Re: negotiating fees with a real estate agent?

Post by sscritic »

Discount is an acceptable term; kickback isn't. Rebate is also acceptable. Redfin calls theirs a refund.
http://www.redfin.com/buy-a-home/refund

My refund exceeded my closing costs after all adjustments, so they cut me a check for the excess after closing.
cheesepep
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Re: negotiating fees with a real estate agent?

Post by cheesepep »

I have. I told a real estate agent I wanted to sell a house. She said six percent. I said four. She remained firm at six. Then I said how about if I give you two houses to sell and can I get four percent? She said yes, and I have her two houses to sell. I never told her two in the beginning. That was key. I got multiple offers and sold just under asking price in less than two weeks.
sscritic
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Re: negotiating fees with a real estate agent?

Post by sscritic »

It can also depend on the price. 4.5% of $1,000,000 is more than 6% of $700,000 (45 is more than 42). Most agents like to make money, not percents of sales they don't get. It also depends if the brokers are sitting around their desks with nothing to do. What is the trend in broker employment (unemployment) where you live?

We asked and got 4.5% back in 2004 on one house. I think it was split 2.5% to the buying agent and 2.0% to our selling agent.
kithwang
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Re: negotiating fees with a real estate agent?

Post by kithwang »

Our friend negotiate the fee down, but learned the agent was only willing to give the buyer agent 1.5%. So don't assume it will be fair to the buyer agent.
sscritic
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Re: negotiating fees with a real estate agent?

Post by sscritic »

kithwang wrote:Our friend negotiate the fee down, but learned the agent was only willing to give the buyer agent 1.5%. So don't assume it will be fair to the buyer agent.
That was a mistake. The split is part of the agreement. When I got 4.5%, the split was clearly stated in the contract. Don't sign a contract you don't read. Or did your friend back out when he saw the contract said only 1.5% to the buyer's agent?
kithwang
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Re: negotiating fees with a real estate agent?

Post by kithwang »

Yes she backed out once she read the contract. It wasn't even a question I would have thought about asking while interviewing agents.
Sagenick48
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Re: negotiating fees with a real estate agent?

Post by Sagenick48 »

I negotiated down my agent and then she gave me an additional discount because my house was on the market so long. As a result I have never hesitated to refer folks to her. Treat folks fair and most will do the same for you, but then I live in a smaller city so different world.
The market goes up, the market goes down.
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